Textile stock jumps after signing MoU with Government of Tamil Nadu to expand its production
Investors looking to diversify their portfolio and make it more stable by way of corporate bonds should have a look at the new NCD (non-convertible debentures) issue by Cholamandalam Investment and Finance Company Ltd (NS:CHLA).
It is a listed NBFC (non-banking finance company) that primarily provides consumer loans such as home loans, vehicle finance, loans to SMEs (small and medium enterprises), etc. The company has a market capitalization of INR 93,409 crore, making it the 61st largest listed entity on the NSE.
On the financial front, its FY23 revenue jumped 28% YoY to a record high of INR 13,105.59 crore while the net income surged 23.7% YoY to INR 2,664.85 crore in the same period. Its net income is growing at a 5-year CAGR of 23.7% which is not bad for a large-cap company. Its shareholding pattern shows that FIIs have increased their stake for the 5th straight quarter, at least, to 20.91%, as of June 2023.
The company now plans to raise INR 500 crore via the issue of secured and redeemable NCDs, with an option to retain an oversubscription till INR 5,000 crore. The credit ratings given by ICRA (NS:ICRA) and India Ratings & Research are AA+ with a stable outlook, which lies in the upper range of debt quality.
There are 6 series of NCDs on offer with two options for the frequency of payment - Annual and Cumulative. The tenure ranges from 22, 37 & 60 months, and coupon rates at 8.25%, 8.3% & 8.4%, respectively. 1 NCD is priced at INR 1,000 and the minimum subscription for 1 lot is 10 NCDs which comes down to a minimum investment of INR 10,000.
Nowadays, there are many platforms from where you can explore such opportunities and some of them are GoldenPi, IndiaBonds, Wint Wealth, etc. As I always say, the liquidity in the bond market is poor, therefore investors should invest in them if they are willing to hold till maturity, or else trying to liquidate them in the secondary market might prove to be a difficult task.
The offer is currently open and will close on 10 August 2023.
Disclosure: I have applied for this tranche.